The Federal Government of Nigeria, through the Central Bank of Nigeria (CBN) has placed a restriction on the importation of fertilizers in the country from the list of those who are eligible to get foreign exchange from the bank.
In 2015, the Federal Government listed 41 import items that are ineligible for foreign exchange in the official Forex market which was introduced by the Central Bank of Nigeria (CBN). Three years after, that figure has increased to 42 as the Nigerian apex bank, the CBN has added ‘fertilizer’ among the items among the items affected by the Forex restriction. However, the CBN will ensure that transactions (Form M) on fertilizer with outstanding payments are settled at appropriate settlement dates.
The Central Bank of Nigeria (CBN) reiterated its warning banks in the country that it will “appropriately sanction” lenders who enable their platforms to be used by people, individual and firms to violate this policy. However, the banking watchdog stated that it received information that this policy was being circumvented by banking platforms as certain firms and individuals were dumping the restricted items in the country.
The Central Bank of Nigeria (CBN) noted that the benefits and privileges arising from this policy would be lost if the development was not checked and examined. The Central Bank of Nigeria (CBN) also disclosed that its Economic Intelligent Unit (EIU) has collaborated with the Economic and Financial Crimes Commission (EFCC) and would begin an immediate investigation of the accounts of the different entities engaged in the act with a view to severe sanctions on the culprits such as a closure of the accounts maintained by the bank, total blacklisting of the Corporates and their Directors.
The recent ban imposed by the apex financial institution of the country, the Central Bank of Nigeria (CBN) on official access to foreign exchange for the importation of fertilizers has proved that the foreign exchange crisis rocking Nigeria at this very point in time is far from over. In a statement signed by the Director, Trade and Exchange Unit of the Central Bank of Nigeria (CBN), Mr. Ahmed Umar which stated that this ban takes a full effect from the 7th of December 2018.
However, an economist, Dr. Patrick Ikenna said that the move may not be associated with the recent depreciation in the value of the Nigerian Naira against the American Dollar, and the effort of the Central Bank of Nigeria (CBN) to defend the Naira from plunging further. Dr. Patrick Ikenna, the C.E.O of Tech and Tact Hub Ltd also connected the move with fall in the price of oil in the international market and the further reduction in the in-flow of foreign exchange into the country.
The governor of the Central Bank of Nigeria (CBN), Godwin Emefiele has hinted at the possibility of the CBN adding more items to the list of ineligible items for Forex. Mr. Godwin Emefiele while speaking at the 53rd Annual Bankers Dinner held in Lagos two weeks ago said that the Central Bank of Nigeria (CBN) had gotten recommendations to add items to the list.